Monday, June 27, 2005

The Institute for the Future observes that we are in the middle of a collision of different forces:

"Companies in emerging high-tech industries have learned that working with competitors can build markets and help avoid costly standards wars."

"The open source movement has shown that world-class software can be built without corporate oversight or market incentives."

"Outsourcing has turned competitors into common customers of design firms and contract manufacturers."

Put these ideas together and you begin to see how far behind the curve the nonprofit technology sector is. Sure, where NPO technology and the broader technology market intersect, we see these themes -- computers, operating systems, groupware -- but in the nonprofit-specific technology sector, we see a market lagging behind. I'm talking about things like donor databases, advocacy platforms, membership management, etc.

Leading firms don't work with one another to build markets, but focus on building proprietary software platforms that seek to be all things to all people (Kintera and Blackbaud illustrate this point) or focus on a small little niche (membership management & case management software). Nonprofits still see open source as "iffy,"built by volunteers and not a viable option compared with proprietary commercial solutions. And finally, the nonprofit technology market makes little use of contract manufacturers/ design firms, instead vendors tend to follow a vertical integration strategy, providing customers with all the services related to their market -- installation, training, support, customization, etc.

A Social Source world actively embraces these themes and put them to work for the customer.

Social Source encourages competitors to work together and build standards that enable customers to switch from vendor to vendor without barriers. Imagine buying advocacy software from Kintera and deciding that you would prefer a consultant and technology support staff based in your city so you can get face to face treatment. Perhaps GetActive has staff in your city. Could you imagine switching from Kintera to GetActive with little pain and trouble? This starts to become possible if the two companies used the same open source technologies & software and agreed to the same standards. If both companies used the open source CiviCRM constituent relationship management core, the migration of basic CRM data would be relatively simple.

In a Social Source world, the software options are not created by a nonprofit staffer with little time and no formal software engineering training. Instead, very robust core software is built by qualified software engineers with the support of a broad open source community. Intermediaries like the Social Source Foundation and Aspiration provide governance, guidance and community building for the open source community.

Social Source means that when customers hire vendors, the project contributes to the whole community through the magic of open source. Competing vendors have an incentive to share innovations and employ the same software engineering organizations to create solutions to their customer needs. Doing so, they can deliver the functionality customers need at a low cost to the vendor.

But this Social Source vision requires a new ecosystem of integrators, hosters and developers to evolve. It requires customers and consultants and intermediaries to start understanding the dynamics that shape the new, new economy. And it requires imaginative and inventive people, funders and intermediaries to take the lead.